English: Flag of the United States Federal Reserve Bank (Photo credit: Wikipedia)
Elizxabeth Warren has proposed that student loans come directly from the Federal Reserve at the current interest rate of 0.75%. That is a excellent idea; banks as middlemen are unnecessary. If Warren’s bill becomes law, I suggest that we follow-up on it with loans to workers so that they can purchase stock in the companies where they work and ultimately to home buyers so that they can purchase their homes at much lower cost. Why should someone be forced to pay two or three times the purchase price of a home in interest in addition to the principal? Then the home interest would no longer need to be tax deductible.
Please see Eliminate the middleman | One World, Ready or Not
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On Sunday January 22, 2012, Fareed Zakaria interviewed David Rubenstein, a founder of the Carlyle Group, a private equity firm, on his program GPS on CNN. The Carlyle Group is a larger version of Bain Capital and Fareed’s interview was designed to explain what private equity firms do. Essentially, they restructure companies for a profit for themselves and their wealthy investors. David Rubenstein has done well for himself having an estimated net worth of approximately $2.6 billion. Private equity firms were formerly known as leveraged buy-out companies, a term that fell into disfavor.
Rubenstein talked about his charitable giving. He has purchased several copies of founding documents and put them on public display. One copy even hangs in the Oval Office of the White House. He also donated money to repair the Washington Monument. Personally, I believe that these gifts, while praiseworthy, should be paid for by our government out of tax revenues. If tax revenues are insufficient, then tax rates on the wealthy and the very wealthy like Rubenstein should be increased.
In closing Fareed asked him about his concerns. As almost all wealthy persons, he is concerned about the deficit and the national debt. That is because the wealthy want to preserve the value of their financial assets against the effects of possible inflation. The US Federal Reserve has two opposing responsibilities, preserve the value of the dollar and keep unemployment low. The Federal reserve usually listens to the 1% and leans toward preserving the value of dollar instead of keeping unemployment low. Rubenstein and other members of the 1% are not concerned about unemployment for themselves.
Please see Mitt and Bain | Creative destruction | Globalization 101
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The birthers and some others have wanted to impeach President Obama ever since he was elected. I say that now is the time to give them that opportunity. The GOP in Congress will oppose any job creation measures until the November, 2012, election and the country cannot wait that long for action. I suggest that Barack use executive action and persuasion to get the Federal Reserve to take emergency action to fund job creation. The balance of Barack’s job legislation will have to wait for Congressional action.
I believe that this action will cause some in Congress to call for the impeachment of the President. That will create the spectacle of a do-nothing Congress acting to impeach a President who is acting to put people back to work. And that will produce a contrast in actions and motivations so stark that everyone, except perhaps Fox News, will be able to see the difference. The voters will decide in November, 2012, who is right.
Please see Barack Obama | Be bold Barack | Defender of the nation
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We need jobs now. We can’t wait until after the 2012 election. We have mouths to feed and bills to pay now. Proposals that the Congress will not enact will not suffice. I propose that the Federal Reserve be persuaded to fund a vast rebuilding of our decaying infrastructure. Let’s use the funds of a possible Quantitative Easing 3 for a good purpose, jobs for Americans now, rather than more loans to banks too big to fail.
Please see Jobs, not Steve
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One World, Ready or Not, the Manic Logic of Global Capitalism by William Greider is an interesting report on the world we live in, by an author who believes that we can make life better for everyone if we take some dramatic actions.
What he proposes is making all workers capitalists as well. Workers would start to accumulate capital in the companies where they work, becoming active investors, rather than the passive investors most stock owners are, either directly or through mutual funds and 401-K’s. When capital ownership is concentrated in a few hands, as it is now, society breaks down into an adversarial relationship between labor and capital, management and unions.
To change that relationship to a harmonious one, where labor and capital are one and the same, Greider suggests that workers borrow the money required to buy stock from the Federal Reserve at low rates of interest. The Federal Reserve used to lend to business and could do so again, rather than dealing only with Wall Street and financial instruments to control interest rates and currency in circulation. Some European central banks continue lending to other than their banks.
This is a suggestion that will require further research on my part, but at first blush, I like the idea. It would break up large concentrations of wealth that threaten our democracy, and it would give workers two sources of income, rather than just the one from their labor. I like it.
Please see Unions